For a US citizen traveling worldwide, what is the best major debit/ATM card (on the Visa or MasterCard networks) to take in terms of lowest fees for withdrawing international currency from ATMs? Withdrawing from foreign ATMs often results in a series of bank fees, currency conversion fees, and ATM fees, and I'm looking for the card with the best policies on these fees to save money during international travel.

I think this depends strongly on where you are traveling to. For example, I was able to use my (Canadian) debit card at an actual branch of my bank located in Turks and Caicos. No fees whatsoever, it was as though I was in my home town. That would not be the case in, say, France.
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Kate GregoryJul 15 '11 at 16:34

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Some pairs of banks in two countries will have agreements between them to not charge extra fees for foreign travellers' transactions. Some multinational banks like HSBC or Citibank might not charge extra fees no matter where the card account is from.
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hippietrailJul 16 '11 at 8:01

As a tip I have started using my credit card to buy stuff instead of cash from the ATM in some countries as much as possible and paying it off the same day via online banking. In countries where I feel safe I withdraw enough money for a couple of weeks at a time to minimize the (non percentage) fees. Pickpockets are thieves. Banks are thieves. The first group may not strike but the second will certainly strike!
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hippietrailJul 20 '11 at 8:06

5 Answers
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I've been living in Europe now for about 5 years but still make the bulk of my income from the US (where I'm from). I have tried many US banks and all the debit cards you can imagine. Most promises of low transaction fees and hassle-free transactions are lies.

Here's what I've learned.

Bank of America (BofA)

I used BofA for all my ATM transactions for 2 years. They have an arrangement with the 8 biggest banks in the world (Global ATM Alliance) Barclays (UK), BNP (France), Deutsche Bank (Germany), etc.

If you use any one of their alliance ATMs they will in theory not charge an ATM fee. However, this is not always true. Some alliance members have ATMs in external zones, for example Deustche Bank has ATMs outside of Germany in both Poland and Czech Republic, etc. They will not charge you in Germany but you may face charges at these external ATMs. Loopholes not withstanding, finding these specific ATMs can be an adventure, one that more often than not ends in tears. BofA also charges high exchange rate fees.

Capital One

They used to have free transaction fees for foreign purchases (one of the few) but no longer, they now charge 1% which is still low, I believe the average is 2-3%. Never assume your card has low transactions or believe a word you read until you try it.

Citibank

Looked great on paper, but wasn't. Do not use Citibank for travel outside the US. I tried using them thinking that, because Citibank has branches all over europe, it would be a good way to transfer money and use ATMs locally but it was not. It was worse then BofA, much much worse. AVOID.

Charles Schwab

This is the card I've been using for the last 3 years and it is awesome. I've never thought it possible to like a bank, but this one has never misled me, yet. Other cards may advertise ATM reimbursement, this one actually does it. The others either have limits, say limit 2 per month, schemes requiring you to pull over a certain amount, have $25,000 at all times, or some other ridiculous crap hidden in fine print that the accountants at Arthur Anderson would have admired.

This card has no weird restrictions, you simply use it. I didn't believe it when I signed up, but have had a perfect experience for 3 years. On the off chance they miss an ATM fee (it happens 1% of the time), you send them an email, they remove it.

Schwab used to have a Credit Card that paid out 2%. 2% on every purchase, no rules, no scary point system. It put 2% of your purchases in your account every month. It was too good to last, unless you were grandfathered in. ;-)
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holdenJul 20 '11 at 13:55

Are there requirements to have a brokerage account at Schwab with a certain amount of activity, or do they offer some variant of free checking? Btw, I'd put that one on top of the answer, for clarity.
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dbkkJul 20 '11 at 19:56

Schwab may have some requirements to open an account, ie credit check, but once accepted I'm fairly certain there are no "activity" limits or similar goodies that other providers hide in their fine print. Their High Yield Checking is Free, I'm not aware of any higher or lower accounts with fees. Hope that helps.
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holdenJul 26 '11 at 14:08

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@dbkk When I signed up with Schwab they required signing up for their free brokerage account (took 10-15m online); but there was no requirement that I ever actually use it. My theory is they're playing a long term game and assuming that eventually a non-trivial fraction of their banking customers will feel like buying stock/etc for the first time and decide to use the Schwab account they're already signed up for instead of shopping around and potentially opening a brokerage account elsewhere.
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Dan NeelyOct 31 '11 at 14:56

I currently use the Charles Schwab High Yield Checking card, which reimburses all ATM fees charged by other banks (even internationally). It's a little bit of a hassle to set up as it requires you to have a linked (but free) brokerage account with them as well. And it's just ATM fees, foreign transaction or currency conversion fees still apply, as far as I know.

It is a bit of a hassel to setup as sometimes you can't do it online, they required one form I had to mail. But, if you plan to travel around for a few weeks or longer this card is a must. At first, I was skeptical about the card, thinking it was too good to be true, but I've been using it for 3 years now and they reimburse the ATM charges about 95% of the time. In the off chance they miss one, you can email them and they will remove it for you. This card is awesome. Don't mess around with BofA or Citibank, I used them for years and they screwed me around 50% of the time.
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holdenJul 20 '11 at 12:57

Bank of Internet USA (not to be confused with Bank of America) offers a free checking account which comes with an ATM card with no withdrawal fees. They also refund other bank's fees up to some small amount. I used their card in several countries in East Asia and Europe with no major problems. The only downside is that they will start charging a 1% currency exchange fee starting September 2011 (currently this is zero as well).

I would discourage anyone from using BofA for their ATMs outside the US. I did it for several years before discovering the Charles Schwab High Yield Checking listed below. BofA is a member of the Global ATM Alliance en.wikipedia.org/wiki/Global_ATM_Alliance which means you can use any of the partner ATMs without fee, but finding a particular ATM in a given country is a huge pain and sometimes they charge the fee anyway.
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holdenJul 20 '11 at 12:48

BTW, BofA charges $5 for their debit card and $10 for their credit card at ATMs outside the US that are not a member of their Alliance. Plus they charge a relatively high exchange rate on top of the flat fee.
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holdenJul 20 '11 at 12:51

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@holden Good warning -- I think most major US banks offer poor terms for international ATM withdrawals. Note that Bank of Internet USA is not related Bank of America (BofA), despite the name similarity.
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dbkkJul 20 '11 at 19:52

I do know that Capital One does not charge a foreign transaction fee on their credit cards. I think they are the only major issuer that does not charge a foreign transaction fee. An Etrade debit card charges 1%. I have not found a debit card that does not charge a foreign transaction fee.

Minimizing ATM fees means carrying more cash around. I tend to carry a lot of cash but some people might not feel comfortable doing this.

I love credit unions but using them outside the US has always been a disaster for me. They are not big enough to make deals with international banks and even if they did refund your ATM fees abroad, it would probably be a the detriment of the other members having to pay higher fees for something else, so it wouldn't make sense. Big banks might be evil, but by being big they have the "ability" to reduce foreign transactions in deal making with other big bad foreign banks. Not to say that they do this, in the case of Citibank & Chase, they charge even more.
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holdenJul 26 '11 at 16:11

Wow! That's the exact opposite of my experience just last year. Seriously, it worked exceedingly well when we traveled to France in September, 2010. There were no problems getting cash from ATMs, which was the original poster's question.
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forestplayAug 1 '11 at 23:34